Best Small Business Loans for Women in 2020 | Fundera

Best For: Women who need a long-term business loan and have strong credit.

First, perhaps the best small business loans for women (or any business owner for that matter) are SBA loans. Once again, although there aren’t SBA loans for women exclusively, SBA loans have some of the most competitive payment terms and interest rates on the market—plus, SBA loans can be used for nearly any business purpose.

Moreover, in addition to loans, the Small Business Administration (SBA) has a wide array of resources for female entrepreneurs as well. We’ll get into many of those resources below, but first, let’s discuss SBA loans for women.

As a government entity, the SBA runs loan programs for small businesses; however, the SBA itself does not make these loans. Instead, banks and other direct lenders actually make the loans, and the SBA subsidizes a portion of the loan if the borrower defaults.

This being said, SBA loans for women (and for any business owner) come with a government guarantee, so lenders find them less risky and are more likely to work with you, even if you’re just starting a business. Therefore, SBA loans for women are great financing options for those who can qualify—you’ll get low interest rates (4% to 9.5%) and long-term financing (seven-year terms or longer).

Plus, the SBA offers multiple different programs within their suite of business loans. For example, the SBA microloan program lends small amounts of money—up to $50,000 in capital—for startups and micro-businesses. There is also the SBA 7(a) loan program, which offers general-purpose working capital for businesses that are already a few years old. And, the SBA 504 loan program provides money specifically for the purchase of commercial real estate or equipment.

To qualify for an SBA loan, you’ll need to meet a range of requirements, typically including both a high credit score and a decent annual revenue. Along these lines, the process to apply for an SBA loan for women is also very involved—meaning significant paperwork and a longer time to get approved.

Nevertheless, an SBA loan is going to be one of the best small business loans for women available, particularly, the 7(a) loan program. The loans within the SBA 7(a) loan program are generally big, flexible, and affordable—even for newer business owners. In fact, last year, SBA loans under the agency’s flagship 7(a) loan program were up 22% for women, hitting an overall record of $23.5 billion in lending dollars. Therefore, if you’re looking for financing for your women-owned business, you’ll certainly want to see if you qualify for an SBA loan.